Prior research finds that economic shocks lead to merger waves within an industry. In this paper, we argue further that customer-supplier relationships between industries drive both industry-level and aggregate merger waves. We construct an industry network using techniques from the graph theory literature, where inter-industry connections are determined by the strength of supplier and customer relations. We find that the strength of industry network connections strongly predicts inter-industry merger activity in the cross-section. Second, we show that merger waves propagate across the industry network over time: high levels of merger activity in an industry lead to subsequently high levels of activity in connected industries. Finally,we find that economy-wide merger waves are explained in part by the diffusion of merger activity across the economic network to multiple industries simultaneously.